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Sonny Moerenhout, Cultivators:

Europe: “Some countries are experiencing a shakeout, but the overall medical market is growing”

The overall medical cannabis market in Europe continues to develop and grow. Yet some countries are dealing with companies that have already exited or awarded licenses that are not being used. So what has happened? “The biggest pain points are in the markets that issued licenses very easily in the early years. There may be dozens of awarded licenses in those countries, but how many of those are actually growing and have a quality product to sell?” says Sonny Moerenhout, Managing Partner at Cultivators. “There’s an important difference between the number of awarded licenses and the companies that have a high-quality product and a customer.”

Meeting the quality standards
“One of the major constraints in the medical market was that there was a lot of product, but that the companies weren’t able to meet the buyers’ quality expectations,” Sonny explains. “As a result, we now see a shakeout happening in those countries where there were a lot of licenses in the initial phase. We see this happening in Portugal, Denmark and Macedonia, for example.”

Why has it been so challenging for those companies to meet the quality standards that their buyers are hoping for? “Many of those companies started with an unclear business plan and an unclear end customer. For many, there was this general idea that they would supply to Germany, but that goal wasn’t achieved. If you don’t know who you’re growing for, you don’t know how to set up your facility and what quality standards to adhere to,” Sonny explains.

The positive side
Luckily, there are also countries that are moving in a positive direction. “Switzerland, Spain, the Czech Republic; those countries moved very slowly at first and are now developing rapidly.” Overall, we shouldn’t think too negatively about the European medical market, according to Sonny. “It may not go as quickly as everyone had hoped, but the medical cannabis market in Europe is increasing.” Moreover, Sonny sees developments in cannabis genetics. “Companies are now looking into a wider array of cannabinoids and terpenes and their effects on the human body. There is more medical research being done on cannabis, which is a very positive development.”

While it may be much more difficult to get funding in this industry than it was years ago, the quality of the projects being realized is much higher. “People are no longer rushing into new projects. The people who get the investments now are serious and fully committed to their projects,” Sonny says.

As a consultancy company, Cultivators notices that many cannabis growers still underestimate the importance of proper dehumidification. “Cannabis plants need much higher light levels than other crops do. As a result, you have more transpiration, and the HVAC systems you use need to have a bigger capacity. That is something that some cannabis companies still underestimate,” Sonny says. “A regularly made mistake is that they go to a local HVAC company, one that is not specialized in horticulture, and think that this technology will be fine in their cannabis facility. Yet there is a big difference between HVAC systems made for horticulture and systems designed for offices, for example. Cannabis especially transpires a lot, which creates a lot of humidity. That humidity needs to be taken into account, or the grower will experience many issues.”

Cannabis training
To help cannabis growers further, Cultivators and Innexo have launched their Operational Excellence Training. “It’s a hands-on cannabis training that is unique in Europe. We’ve already completed several successful trainings since our launch last year. We especially notice interest from new LPs who want their staff to have practical knowledge before starting their own production. We will soon be launching a website that has all the information,” Sonny says.

For more information:
[email protected]